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EXHIBIT 10.51
EXECUTION COPY
CONSENT, WAIVER AND AMENDMENT AGREEMENT
Consent, Waiver and Amendment Agreement (this "Agreement"),
dated as of March 15, 1996, by and among Kerr Group, Inc., a Delaware
corporation (the "Company"), PNC Bank, National Association ("PNC"), John
Hancock Mutual Life Insurance Company ("John Hancock"), Barnett & Co.
("Barnett"), New York Life Insurance Company ("New York Life"), Massachusetts
Mutual Life Insurance Company ("Massachusetts Mutual"), Massmutual/Carlson CBO,
N.V. ("Massmutual" and, together with John Hancock, Barnett, New York Life and
Massachusetts Mutual, the "Note Purchasers"), and The First National Bank of
Boston ("Bank of Boston" and, together with PNC and the Note Purchasers, the
"Lenders").
R E C I T A L S:
WHEREAS, PNC and the Company entered into that certain
Receivables Purchase Agreement, dated as of January 1, 1995 (as amended, the
"Receivables Purchase Agreement"); and
WHEREAS, the Note Purchasers (or their predecessors in
interest) and the Company entered into certain Note Agreements, each dated as
of September 15, 1993, providing for the issuance and sale of $41,000,000
aggregate principal amount of the Company's 9.45% Series A Senior Notes due
September 15, 2003 (the "Series A Senior Notes")and $9,000,000 aggregate
principal amount of the Company's 8.99% Series B Senior Notes due September 15,
1999 (collectively with the Series A Senior Notes, the "Senior Notes")(as
amended, the "Note Agreements"); and
WHEREAS, Bank of Boston and the Company entered into that
certain Letter Agreement, dated February 9, 1995 pursuant to which Bank of
Boston extended certain financial accommodations to the Company, including a
loan in the maximum principal amount of $10,000,000 evidenced by a promissory
note dated February 1, 1995 to Bank of Boston in the principal amount of
$10,000,000 (collectively, the "Letter Agreement"); and
WHEREAS, Bank of Boston and the Company further entered into
that certain Amended and Restated Loan and Security Agreement, dated as of
January 5, 1996, pursuant to which Bank of Boston amended and restated the
financial accommodations extended to the Company under the Letter Agreement,
which are presently evidenced by an amended and restated commercial promissory
note dated January 5, 1996 to Bank of Boston in the principal amount of
$10,000,000 (collectively, the "Restated Loan Agreement"); and
WHEREAS, pursuant to a certain Agreement, dated as of January
5, 1996 (the "January Consent"), PNC waived certain provisions of the
Receivables Purchase Agreement, the Note
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Purchasers waived certain provisions of the Note Agreements and Bank of Boston
waived certain provisions of the Letter Agreement; and
WHEREAS, pursuant to a certain Amendment Agreement, dated as
of January 5, 1996 (the "Amendment Agreement"), the Note Purchasers and the
Company amended certain provisions of the Note Agreements; and
WHEREAS, in consideration of Bank of Boston entering into the
Restated Loan Agreement, the Company granted to Bank of Boston liens on and
security interests in certain of its assets, which liens and security interests
were consented to by PNC and the Note Purchasers in accordance with the terms
of the January Consent; and
WHEREAS, in further consideration of Bank of Boston entering
into the Restated Loan Agreement, Santa Fe Plastics Corporation, a California
corporation ("Santa Fe"), executed and delivered to Bank of Boston a Continuing
Guaranty, dated as of January 5, 1996 (the "Santa Fe Guaranty"), pursuant to
which Santa Fe guaranteed the payment of the Additional Obligations (as such
term is defined in the Restated Loan Agreement) to Bank of Boston; and
WHEREAS, the Company proposes (i) to sell to Alltrista
Corporation, an Indiana corporation ("Alltrista"), substantially all of its
equipment, contract rights (other than those relating to the sale of finished
home canning inventory), trademarks, and licenses used by Kerr in its consumer
products/home canning business, pursuant to an Asset Purchase Agreement between
Kerr and Alltrista substantially in the form attached hereto as Exhibit A (the
"Asset Purchase Agreement"), and (ii) to retain Alltrista as its sales agent
for its finished home canning inventory, pursuant to a Sales Agent Agreement
between Kerr and Alltrista substantially in the form attached hereto as Exhibit
B (the "Sales Agent Agreement"); and
WHEREAS, the Company has requested that each of the Note
Purchasers, PNC and Bank of Boston consent to the transactions contemplated by,
and the performance by the Company of its obligations under, the Asset Purchase
Agreement and the Sales Agent Agreement, and each of the Note Purchasers, PNC
and Bank of Boston are willing to do so subject to the terms and conditions set
forth in this Agreement; and
WHEREAS, PNC has agreed to waive certain provisions, and to
amend certain other provisions, of the Receivables Purchase Agreement, the Note
Purchasers have agreed to waive certain provisions of the Note Agreements, and
Bank of Boston has agreed to waive certain provisions, and to amend certain
other provisions, of the Restated Loan Agreement.
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NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereby agree as follows:
SECTION 1. Waiver.
Subject to the further provisions of this Agreement:
(a) the Note Purchasers (i) waive from and including March
30, 1996 through and including May 15, 1996 any Default or Event of Default
(each as defined in the Note Agreements) solely arising out of the Company's
failure to comply with the provisions of Section 10.1 or 10.9 of the Note
Agreements, and (ii) waive from and including March 1, 1996 through and
including May 15, 1996 any Default or Event of Default solely arising out of
the Company's failure to comply with the provisions of Section 10.8 or 10.16 of
the Note Agreements;
(b) PNC (i) waives from and including March 30, 1996 through
and including May 15, 1996 any default or Termination Event (each as defined in
the Receivables Purchase Agreement) solely arising out of the Company's failure
to comply with Section 10.1 or 10.9 of the Note Agreements, including without
limitation any default or Termination Event arising under Section 6.17 of the
Receivables Purchase Agreement to the extent such default or Termination Event
solely relates to Section 10.1 or 10.9 of the Note Agreements, and (ii) waives
from and including March 1, 1996 through and including May 15, 1996 any default
or Termination Event solely arising out of the Company's failure to comply with
Section 10.8 or 10.16 of the Note Agreements, including without limitation any
default or Termination Event arising under Section 6.17 of the Receivables
Purchase Agreement to the extent such default or Termination Event solely
relates to Section 10.8 or 10.16 of the Note Agreements; and
(c) Bank of Boston (i) waives from and including March 30,
1996 through and including May 15, 1996 any default or Event of Default (each
as defined in the Restated Loan Agreement) solely arising out of the Company's
failure to comply with Section 10.1 or 10.9 of the Note Agreements, and (ii)
waives from and including March 1, 1996 through and including May 15, 1996 any
default or Event of Default solely arising out of the Company's failure to
comply with Section 10.8 or 10.16 of the Note Agreements.
SECTION 2. Consents. Each of the Note Purchasers, PNC, and
Bank of Boston (collectively, the "Lenders") hereby
(a) consents to the Company entering into the Asset Purchase
Agreement and to the consummation of the transactions
contemplated thereby and the performance by the Company of its
obligations thereunder, notwithstanding Section 6(g) of the
Restated Loan
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Agreement, Sections 10.5 and 10.6 of the Note Agreements, or
any other provision of the Restated Loan Agreement, the Note
Agreements or the Receivables Purchase Agreement, as the case
may be, prohibiting or otherwise limiting any such sale of
assets and property by the Company as is contemplated by, and
on substantially the terms and conditions set forth in, the
Asset Purchase Agreement, provided, that the foregoing consent
shall not, and shall not be construed to, waive any Lender's
right to declare a default or an event of default under the
Restated Loan Agreement, the Note Agreements or the
Receivables Purchase Agreement, as the case may be, arising
out of the Company's payment of indemnity obligations or the
occurrence of a default or other breach of obligation by the
Company under the Asset Purchase Agreement;
(b) waives any default or event of default under the Restated
Loan Agreement, the Note Agreements or the Receivables
Purchase Agreement, as the case may be, solely arising out of
the sale of assets and property by the Company contemplated
by, and on substantially the terms and conditions set forth
in, the Asset Purchase Agreement, provided, that the foregoing
waiver shall not, and shall not be construed to, waive any
Lender's right to declare a default or an event of default
under the Restated Loan Agreement, the Note Agreements or the
Receivables Purchase Agreement, as the case may be, arising
out of the Company's payment of indemnity obligations or the
occurrence of a default or other breach of obligation by the
Company under the Asset Purchase Agreement; and
(c) consents to the payments to be made by the Company to Bank
of Boston and the Note Purchasers, respectively, pursuant to
Section 4(a) and Schedule 1 hereto.
SECTION 3. Amendments to Restated Loan Agreement and
Receivables Purchase Agreement.
(a) Amendment to Restated Loan Agreement. Bank of Boston and
the Company hereby agree that the definition of "Maturity Date" in the Restated
Loan Agreement is amended by deleting "April 15, 1996" and inserting therefor
"May 15, 1996."
(b) Consent to Amendment. Each of the Note Purchasers and
PNC hereby consents to the amendment to the Restated Loan Agreement set forth
in Section 3(a) of this Agreement.
(c) Amendment to Receivables Purchase Agreement. (i) PNC
and the Company hereby agree that the term "Maximum Purchaser's Net Investment"
set forth in Section 1.1 of the
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Receivables Purchase Agreement is amended and restated to read as follows:
"Maximum Purchaser's Net Investment" means (i) Eleven Million
Dollars ($11,000,000) for the period from and including March 15, 1996 to, but
not including, July 15, 1996, and (ii) Ten Million Dollars ($10,000,000) at any
time thereafter.
(d) Consents to Amendment. Each of the Note Purchasers and
Bank of Boston hereby consent to the amendment to the Receivables Purchase
Agreement set forth in Section 3(c) of this Agreement.
SECTION 4. Consideration.
(a) Payments. (i) In consideration of the consents and the
waivers granted by the Lenders in Sections 1 and 2 of this Agreement and the
amendment to the Restated Loan Agreement set forth in Section 3 of this
Agreement, on the first business day following the date of the closing of the
Asset Purchase Agreement (the "Initial Payment Date") the Company will pay to
Bank of Boston and the Note Purchasers the respective amounts set forth on
Schedule 1 hereto in immediately available funds. Immediately following the
closing of the Asset Purchase Agreement, the Company shall give irrevocable
written instructions to wire the funds referred to on Schedule 1 hereto as soon
as practicable and in any event no later than 9:00 a.m. on March 18, 1996, and
shall furnish each of the Lenders with a copy of such instructions.
(ii) If the Company fails to make the payments to Bank of
Boston and the Note Purchasers, respectively, due under the terms of this
Section 4(a) and Schedule 1 hereto, the consents, waivers and amendments
granted and agreed to in this Agreement shall immediately be revoked, and this
Agreement shall immediately terminate without further notice to the Company and
shall have no further force or effect.
(b) Release of Liens. Bank of Boston acknowledges and agrees
that, upon its receipt of $3,500,000 of the amount to be paid to it as
described in Section 4(a) of and Schedule 1 to this Agreement, the Additional
Obligations (as such term is defined in the Restated Loan Agreement) shall be
paid and satisfied in full, and Bank of Boston shall be deemed to have
released its liens on the Collateral (as such term is defined in the Restated
Loan Agreement); provided, that, notwithstanding the foregoing, Bank of Boston
shall retain its right under the Restated Loan Agreement to recover any
hereafter arising reasonable costs, fees and expenses, including, but not
limited to, attorneys' fees and other professional fees, costs of enforcement,
liabilities, and obligations of the Company owing to Bank of Boston in
connection with the Obligations (as such term is defined in the Restated Loan
Agreement). Upon its receipt of such $3,500,000, Bank of Boston will deliver
executed UCC-3 termination statements, in
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form and substance satisfactory to the Company, and such other instruments and
agreements that the Company deems reasonably necessary and appropriate to
release and discharge the liens of Bank of Boston in the Collateral.
SECTION 5. Representations, Warranties and Covenants.
(a) Corporate Power and Authority. Each party hereto
represents that it has all requisite corporate power and authority to enter
into and perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by all necessary
corporate action on the part of each such party.
(b) Compliance with Other Instruments, etc. The Company
represents that the consummation of the transactions contemplated by this
Agreement and, except as to such contracts and agreements set forth in Schedule
7.4 to the Asset Purchase Agreement, the Asset Purchase Agreement will not
result in any breach of, or constitute a default under, or result in the
creation of any mortgage, lien, pledge, charge, security interest or other
encumbrance in respect of any property of the Company under, any indenture,
mortgage, deed of trust, bank loan or credit agreement, corporate charter,
by-law, or other agreement or instrument to which the Company is a party or by
which the Company or any of its properties may be bound or affected, or violate
any existing law, governmental rule or regulations, or any order of any court,
arbitrator or governmental body, applicable to the Company or any of its
properties.
(c) Governmental Consent. The Company represents that no
consent, approval or authorization of, or registration, filing or declaration
with, any governmental authority is required for the validity of the execution
and delivery by the Company of this Agreement or the Asset Purchase Agreement
or the consummation of the transactions contemplated hereby or thereby.
(d) Principal Payments. The Company covenants, and each of
the Note Purchasers and Bank of Boston hereby agree, that until May 15, 1996,
the Company shall not (unless each of the Note Purchasers and Bank of Boston
jointly give notice to the Company to the contrary) make any further payments
on the outstanding principal amounts of the obligations under the Note
Agreements and the Restated Loan Agreement (whether by regularly scheduled
payment or mandatory or optional prepayment).
SECTION 6. Expenses. Without limiting the generality of any
provision of the Receivables Purchase Agreement, the Note Agreements (each as
amended by the Amendment Agreement), the Letter Agreement, or the Restated Loan
Agreement, the Company agrees that it will pay on the date of this Agreement
any invoices or statements submitted on or prior to the date of this Agreement
for the reasonable fees, expenses and client charges of counsel for the
Lenders, for any services rendered in connection
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with the transactions contemplated hereby and with respect to this Agreement
and any other document delivered pursuant to this Agreement (including for any
amounts due and unpaid as of the date hereof under the respective agreements,
including the Restated Loan Agreement, the January Consent, and the Amendment
Agreement), and the Company further agrees that it will hereafter promptly pay
any additional reasonable fees, expenses and client charges of counsel for the
Lenders, for any services rendered in connection with the transactions
contemplated hereby and with respect to this Agreement and any other document
delivered pursuant to this Agreement.
SECTION 7. Effectiveness. This Agreement shall become
effective upon the delivery to the Company of a copy of this Agreement executed
by each of the Lenders.
SECTION 8. Counterparts; Separate Agreements. This Agreement
may be executed simultaneously in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
SECTION 9. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles.
SECTION 10. Headings. The headings of the several sections
of this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of this Agreement.
SECTION 11. No Other Changes. (a) Except as expressly
stated herein, the Receivables Purchase Agreement, the Note Agreements (each as
amended by the Amendment Agreement), the Restated Loan Agreement and the
January Consent are unaffected hereby and shall remain in full force and effect
in accordance with the respective terms thereof.
(b) Except as expressly set forth herein, the Lenders do not
waive (i) any breaches or defaults under the Note Agreements (each as amended
by the Amendment Agreement), the Receivables Purchase Agreement, the Restated
Loan Agreement or the January Consent, as the case may be, or any other
agreements executed concurrently therewith or pursuant thereto, whether known
or unknown, previously or hereafter arising, or of any nature or character
whatsoever, or (ii) any of their respective rights or remedies thereunder or
under applicable law, including (but not limited to) any Make-Whole Premium (as
such term is defined in the Note Agreements) to which the Note Purchasers may
be entitled pursuant to the terms of Section 9 of the Note Agreements on
account of the payments due under the terms of Section 4(a) and Schedule 1
hereto.
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SECTION 12. Reaffirmation. The Company hereby represents and
warrants to the applicable Lender that each of the representations and
warranties contained in the Restated Loan Agreement, the Note Agreements or the
Receivables Purchase Agreement, as the case may be, were true and correct in all
material respects when made and, except to the extent (a) that a particular
representation or warranty by its terms expressly applies only to an earlier
date, or (b) the Company has previously advised such Lender in writing as
contemplated under the respective agreement, are true and correct in all
material respects as of the date of this Agreement.
SECTION 13. Conflict of Terms. In the event of any
inconsistency between the provisions of this Agreement and any provision of the
Note Agreements (each as amended by the Amendment Agreement), the Receivables
Purchase Agreement, or the Letter Agreement or Restated Loan Agreement, as the
case may be, the terms and provisions of this Agreement shall govern and
control.
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IN WITNESS WHEREOF, the parties hereto have signed, or caused
their duly elected officer to sign on the date first written above.
KERR GROUP, INC.
By: /s/ Geoffrey A. Whynot
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PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------------
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
NEW YORK LIFE INSURANCE
COMPANY
By:
-------------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
MASSMUTUAL/CARLSON
CBO, N.V. LIFE
By:
-------------------------------------
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IN WITNESS WHEREOF, the parties hereto have signed, or caused
their duly elected officer to sign on the date first written above.
KERR GROUP, INC.
By:
-------------------------------------
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ANTHONY TRUNZO
-------------------------------------
Anthony L. Trunzo
Vice President & Manager
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
NEW YORK LIFE INSURANCE
COMPANY
By:
-------------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
MASSMUTUAL/CARLSON
CBO, N.V. LIFE
By:
-------------------------------------
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IN WITNESS WHEREOF, the parties hereto have signed, or caused
their duly elected officer to sign on the date first written above.
KERR GROUP, INC.
By:
-------------------------------------
PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------------
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By: /s/ STEPHEN J. BLEWITT
-------------------------------------
Investment Officer
NEW YORK LIFE INSURANCE
COMPANY
By:
-------------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
MASSMUTUAL/CARLSON
CBO, N.V. LIFE
By:
-------------------------------------
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IN WITNESS WHEREOF, the parties hereto have signed, or caused
their duly elected officer to sign on the date first written above.
KERR GROUP, INC.
By:
-------------------------------------
PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------------
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
NEW YORK LIFE INSURANCE
COMPANY
By: /s/ LYDIA S. SANGREE
-------------------------------------
Lydia S. Sangree
Assistant Vice President
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
MASSMUTUAL/CARLSON
CBO, N.V. LIFE
By:
-------------------------------------
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IN WITNESS WHEREOF, the parties hereto have signed, or caused
their duly elected officer to sign on the date first written above.
KERR GROUP, INC.
By:
-------------------------------------
PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------------
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
NEW YORK LIFE INSURANCE
COMPANY
By:
-------------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ RICHARD C. MORRISON
-------------------------------------
Vice President
MASSMUTUAL/CARLSON
CBO, N.V. LIFE
By:
-------------------------------------
Kerr Group Inc. Consent, Waiver and Amendment Agreement
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IN WITNESS WHEREOF, the parties hereto have signed, or caused
their duly elected officer to sign on the date first written above.
KERR GROUP, INC.
By:
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PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------------
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
NEW YORK LIFE INSURANCE
COMPANY
By:
-------------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
MASSMUTUAL/CARLSON
CBO, N.V. LIFE
By: MESSPIERSON TRUST (CURACAO) N.V.
-------------------------------------
Managing Director
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BARNETT & CO.
By: /s/ RICHARD McCORMICK
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THE FIRST NATIONAL BANK OF BOSTON
By:
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BARNETT & CO.
By:
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THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Dougles Vannah, V.P.
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SCHEDULE 1
SCHEDULE OF PAYMENTS
1. BANK OF BOSTON
The Company will make a payment to Bank of Boston in
repayment of a portion of the outstanding principal amount of the obligations
under the Restated Loan Agreement (consisting of the entire $3,500,000
principal amount of the Additional Obligations and $460,177 of the principal
amount of the Original Obligations) on or prior to the Initial Payment Date in
the amount of $3,960,177.
2. NOTE PURCHASERS
The Company will make a payment to the Note
Purchasers in repayment of a portion of the aggregate outstanding principal
amount of the obligations under the Note Agreements on or prior to the Initial
Payment Date in the aggregate amount of $3,539,823 (such aggregate amount to be
distributed pro rata to the Note Purchasers in accordance with their respective
shares of the total aggregate outstanding principal amount of the obligations
under the Note Agreements).